Probably the most revolutionary development in the life industry since the universal life concept is the movement towards health related insurances. And it is happening right now.In theory life offices could package a set of optional medical covers and put them on the market within six months. As medical scheme members become more disgruntled about rocketing medical aid fees, they are increasingly looking to the life industry for a suitable alternative.Recently, medical schemes have added to their members’ woes by further restricting claims conditions. In particular, a new agreement to limit the scale of benefits for doctors’ consultations could well he passed. Many schemes have an annual aggregate claims limit for the individual and his family - although they too have been increased recently. Another problem is that not all hospitals, doctors and specialists charge the tariff rates set down by the medical scheme of benefits, leaving the member with additional costs.As regards the state’s view on medical care and expenses, ii has long expressed the need for increased privatisation of health services. Individuals would then have less access to government subsidised hospitals and clinics, and the burden for payment would add to the much strained financial resources of the individual.In facing the challenge, life assurers are, however, limited in what they can offer because they are not registered in terms of the Medical Schemes Act of 1967. For their part, medical schemes are also limited because of the inflexible nature of this law which governs them, Even if the legislators do recognise the need for less regulation in favour of market forces, consumers simply cannot wait for the cogs of reform machinery to churn. So how can the consumers of today obtain a comprehensive medical package to suit both their needs and their pockets?Insurance Times asked a number of life assurers and brokers about how they would put together the ideal package. Our accompanying list suggests what we feel would be the essential ingredients of such a package. Many felt that all if not most of the ingredients could be covered outside the medical schemes sector. The overall suggestion was that brokers would have to put together a comprehensive package because individual life assurers would not be able to go it alone.Says Bruce Howard, deputy GM marketing of AA Life, “Possibly the best way, with the situation that exists, is to get a variety of assurers and insurers to co-operate on a single package.” According to him, what has worked in the past, is where a short-term insurer and a life company have underwritten different parts of one plan, as in “hospital cash plans”, for example. The life cover is provided by the assurer and the daily cash pay-out by the insurer, with each underwriting the part for which they have a licence.This idea is catching on. One such example is the Standard Bank Hospiplan, which is underwritten by Crusader Life and Guardian National.As for one life assurer taking on the task, most doubted if it was feasible. Says Sid Kaplan, assistant GM marketing of Liberty Life, “Not only will legislation prevent this, but the technical expertise necessary to design and cost an ultra-comprehensive policy of this nature is not really available in one single cony.”Mr Kaplan feels that the main difficulty is that for many of the contingencies there are no statistics or collated experience which would make it very difficult if not impossible to determine the cost of the package. Also, he adds, “We don’t believe any institution would have the systems available to cost, administer and pay all claims on all these various contingencies.”Ralph Dissell, director of Dissell and Associates, agrees that one single company could not produce a single comprehensive package due to legislative restrictions and that a broker would have to put the package together.He does, however, feel that whatever package a broker put together would have its shortfalls. The biggest drawback concerns the subject of age. “Medical aid societies cannot disqualify members due to age, providing they have been in employment, or on a scheme and then retired, or have been put on pension, provided they continue to pay contributions,” he says.“Short term insurers, on the other hand, implement age limits on personal accident, hospitalisation policies, and so on. The drawback, therefore, is anybody who opts for an alternate medical cover, could be disqualified from protection when they need it most.”As to the cost for such a package, Mr Dissell feels that it would depend on how much cover the client requires, but he quoted an estimated hypothetical figure which was as little as about R80 per month. As regards administration and technical barriers, he feels they are minimal. With the powerful computer systems of today, it would be quite possible to administer such a package.He says that the threat of sanctions does not pose too big a problem as there are numerous computer programmes which are locally adapted. He does foresee another problem and that is the lack of skills and expertise available to operate the necessary systems.Mr Howard points out another obstacle as regards the selling of the product. He says, “A policy of this nature, being totally comprehensive, would also be superfluous in a lot of areas for most people.“Everyone has different needs and not all people need the same remedies. You might likely find consumer resistance as they would probably believe they were purchasing things they did not require within the plan which they were paying for.”Mr Howard says that it would be more viable, cheaper and a lot more practical for the client to pick and choose what he required. So it was not without considerable difficulty that Insurance Times put a theoretical package together. The key concern is where are the gaps?An interesting one that Mr Dissell notes concerns farmers who are not covered in any way in the event of terrorism - since most policies cover injury in the event of urban terrorism. He says that certain life assurers include urban terrorism, but the cover does not extend to death or injury caused by a land-mine planted on a rural dirt road, for example.“However, we offer a product to medical schemes for injury due to passive war. This is defined as the murder, maiming and menacing of innocents to inspire fear in order to gain political ends. Such cover, available to 53 medical schemes, costs only 50 cents per member per month.”Some life companies were understandably reluctant to discuss the ideal comprehensive package for fear of disclosing their respective marketing strategies.In answer to the question, “To what extent have you developed products in anticipation of possible changes in legislation for medical schemes?”, life assurers were very cagey about any developments. A spokesman from one life office replied, “We could develop a package that would cover approximately 80% of the costs of injuries you mention in your list. “Unfortunately this is too confidential and too comprehensive to release prematurely.”Another spokesman answered, “I have a problem in replying because to answer your questions correctly, I would be revealing elements of our marketing strategy which at this stage we would not want to publicise.”Interestingly though, when asked how long it would take to develop such a product, most answered that it wouldn’t take longer than about six months.